How Customer Intelligence drives Innovation

With increasing digitization and globalization, the way businesses operate is changing. Consequently, there is a transformation in the ways customers discover, interact with, and purchase goods or services from businesses. There is also high competition, including from startups globally, and new consumer preferences, such as a push towards sustainability. For businesses, being relevant to the customers while staying competitive requires walking on the innovation tightrope. Customer intelligence allows companies to effectively serve customers while advancing innovative solutions.

The famous Austrian-American management thinker Peter Drucker remarked that “there is only one valid definition of a business purpose: to create a customer.” In this article, learn how to create and retain the ideal customers for your business.

Data-driven Customer Intelligence

Earlier, companies found it easy to understand customer behavior. This was because most of them sold their products or services through a single channel. For instance, fast-moving consumer goods (FMCG) companies would sell their goods exclusively through retailers, making it simple to obtain consumer buying patterns. For marketing, companies relied on a few channels such as banners and television advertisements. Today, there are dozens of channels through which consumers find and buy your products.

The omnichannel nature of consumer data makes deriving any insights from it a herculean task. Yet, consumer intelligence is even more important for staying relevant than it was a few decades back because of the hypercompetitive nature of the market today. Data-driven customer intelligence solutions aggregate information from a wide range of internal and external sources. This allows them to convert consumer patterns into actionable insights, allowing companies to quickly adapt according to changing market trends.

Role in advancing Open Innovation

Data-driven customer intelligence also advances businesses’ open innovation. There are two prominent ways it does so. Firstly, it constitutes a vital part of environmental scanning, a process that allows companies to understand the environment they operate in. Understanding changing consumer trends enables companies to quickly adapt to the market.

Secondly, it is central to the customer-based innovation approach that many businesses take for innovation management. This approach couples product development with value creation for customers, for instance by using customer feedback in the design of new product lines.

Customer intelligence enables companies to leverage customer-centric innovation and stay ahead of emerging trends.

Why is Customer Intelligence Important?

Customer intelligence allows companies to balance the need to serve immediate customer trends with long-term innovation goals. Following are the objectives that it serves:

Segment Your Customers

Not all customers are built the same. Different customer demographics often have different reasons to purchase a product or service. When consumers feel the products are built with them in mind, they are more likely to become loyal customers. More importantly, few customers account for the majority of the sales, particularly for B2B companies. Understanding who your best customers are allows you to generate sustainable revenue streams.

When we think of segmentation, it is often along gender, age, ethnicity, or other demographic criteria. While these are important, it is also important to segment customers based on the customer lifetime value (CLV). This metric measures the worth of each customer throughout their lifetime for your business. It helps you balance short-term and long-term marketing goals to maximize profits.

Map the Customer Journey

The amount of customer data is staggering. Social media posts, eCommerce sales, product reviews, device data stored over the cloud, and direct interactions with brands are all rich sources of customer data. By contextualizing these data, customer intelligence allows companies to map the entire customer journey.

Customer journey mapping enables targeted marketing, thereby improving conversion rates. It also identifies points of customer churn or where customers stop engaging with your company. This enables process improvements that improve customer experience and is something that you must do regularly.

Customer Experience as a Key Differentiator

In a highly competitive environment, particularly when the price of a product doesn’t significantly vary across brands, the customer experience becomes the key differentiator. By personalizing the experience for each customer segment, customer intelligence improves the competitiveness of your company. Consumer behavior patterns shift rapidly as new technologies come up at lighting speed. To adapt the customer experience accordingly and stay on top of your competitors, you need to incorporate customer intelligence in your innovation strategy.

Here, customer sentiment analytics is an important tool. Companies need to measure customer experience across all possible checkpoints ranging from the buying experience to delivery and usability.

Increase Customer Retention

A major indicator of the average CLV and customer loyalty is customer retention. Retaining customers requires continuous efforts in terms of staying ahead of emerging trends as well as offering fresh value propositions over time. Customer intelligence solutions map how consumers react to emerging trends, enabling companies to decide which trends to innovate in. Moreover, moving early provides a competitive advantage that brings new customers as well.

Analysis of customer retention data identifies the reasons you lose customers. This data comes from disparate sources such as direct feedback, news stories, and consumer forums. Customer intelligence converts these data into actionable insights that help companies reduce churn and, thereby, increase customer retention.

Leverage Data for Customer Intelligence

A data-driven approach takes the hassle out of scanning the customer data and provides insights that advance customer-based innovation. It gives you actionable insights from billions of data points from disparate sources. The StartUs Insights Discovery Platform analyzes firmographic data on over 2,5 million startups to identify startups and technologies that enable you to tap customer intelligence. Some of our services include:

• Startup Database: Covers hundreds of relevant startups that match your innovation goals.
• Technology Map: Visualizes emerging technologies and their applications being developed by startups and companies in your field of interest.
• Technology Report: Provides firmographic data and insights on highly relevant startups, companies, and the technologies they develop.

To learn how customer intelligence provides you a competitive advantage, get in touch today!